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Health Insurance & Affordable Care Act

GOP Senators Propose Obamacare Overhaul

WebMD News from Kaiser Health News

By Mary Agnes Carey

Tue, Jan 28 2014

A health care overhaul plan released Monday by three Senate Republicans may reveal how the party will handle the issue for the 2014 elections and beyond.

Sens. Orrin Hatch of Utah, Tom Coburn of Oklahoma and Richard Burr of North Carolina unveiled a legislative framework that would scrap much of the 2010 health law, replacing those provisions with ones the lawmakers say will increase consumer choice and reduce health care costs.

“With our plan, we’ve shown once again that by empowering Americans — not Washington — with the right tools and information, they will make the best informed health care decisions for themselves,” Hatch said in a statement.

It would repeal the health law’s requirements on individuals and employers to purchase health care coverage. It would scrap the law’s Medicaid expansion and give states more control of Medicaid, scale back the size of tax credits to help people buy health insurance and scrap the law’s new taxes and fees. It would also eliminate the health insurance marketplaces set up under the federal health law.

Insurers would still be prohibited from imposing lifetime limits on coverage. Plans would be required to offer dependent coverage up to age 26, although a state could opt out of enforcing that provision on the insurers it regulates.

Insurers could charge an older person no more than five times what they charge a younger person — the health law only allows insurers to charge up to three times more to older people — but states could impose rating rules that were more or less restrictive.  Subsidies would be based on age  — not income — and be available to those up to 300 percent of the poverty threshold, not 400 percent as the health law does.

Individuals who maintain continuous coverage could not be charged more for a pre-existing medical condition, but if they have a gap in coverage they could be subject to medical underwriting, where insurers could charge them more for coverage based on their medical history.

The proposal would not change the long-standing practice of allowing employers to fully deduct the cost of providing health insurance. However, some employees getting very generous coverage would have to pay taxes on the value of some benefits. The proposal would cap the tax exclusion for an employee’s health coverage at 65 percent of an average plan’s cost.

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